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The Federal Trade Commission (“FTC”) recently amended Part 3 of its Rules of Practice related to competition and consumer protection hearings. The changes – to eight sections in total – are designed to make this administrative process more efficient as part of an announced ongoing effort by the FTC to review its rules and ensure maximum efficiency. These revisions include clarifications to the scheduling of discovery, a cost-cutting measure of no longer requiring video recording of all witnesses, and modifications to the admissibility of expert testimony.

The first set of changes apply to the FTC’s general discovery provisions, clarifying that discovery demands cannot be issued until a scheduling order is entered, post-scheduling conference, that outlines the results of the scheduling conference and the schedule for discovery and the entire proceedings. This section was also revised to make clear that the general discovery provisions in Section 3.31 apply to all discovery under Part 3, including that of third parties. In addition, several edits were made to the Standard Protective Order offered under Appendix A to Section 3.31, to clarify the scope and definition of what is “confidential” under the order.

The discoverability of expert testimony was limited by the addition of new language that expressly prohibits discovery of drafts of expert reports and communications between attorneys and their party’s experts, with two exceptions. Communications between attorney and expert are discoverable if they relate to compensation of the expert or the identification of facts or assumptions given by the party’s attorney to the expert and used in forming his or her opinion. Finally, these revisions now allow the Administrative Law Judge (“ALJ”) to alter the prehearing discovery schedule to provide additional time for expert discovery, provided that the change does not alter the evidentiary hearing date.

Section 3.43(b), which defines admissible evidence and hearsay, was amended to include an express statement that expert reports are admissible hearsay. This section also now includes a requirement that the admission of any prior testimony, expert reports or other, must be done upon consent of the parties or by motion and approval of the ALJ after determining that such evidence is not duplicative, does not present undue hardship to the other side, and is beneficial in the resolution of the matter at issue. This requirement, which excludes prior testimony from FTC’s investigation hearings, was put in place to limit the admission of burdensome volumes of unnecessary material.

Another effort toward greater efficiency is the elimination of the previous requirement that all “live oral testimony of each witness…be video recorded digitally.” Finding that the benefit of having the video on record to later examine a witness’s demeanor did not justify its expense, now video recording of a witness will only be done upon a party motion granted by the ALJ. These revisions also include provisions for who should provide the recording services when necessary and who bears the cost.

Several final changes clarify the intention of previous rules or revise earlier errors. Previously, parties were required to identify confidential documents on their first page only. Now, the revised rules require parties to indicate the confidential nature of a document on every page. The language of Section 3.52 regarding appeals was revised to clarify that oral argument must be held after reply briefs or objections are submitted. Finally, a reference in Section 3.83 to the Equal Access to Justice Act that was originally cited incorrectly has now been fixed.

These changes are not subject to public comment and will become effective on their date of publication in the Federal Register.

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